Zuckerberg wins Meta deal to help him foot bill for possible California billionaire tax

ByDearbail Jordan, Business reporter and Kali Hays, Technology reporter. 22 October 2026, 17: 16 BST.

Key points

• The company's headcount is down 15% from a year ago, meaning it has shed at least 10, 000 workers.
• Meta remarked on Wednesday it planned to spend as much as $145bn this year on AI projects.
• Meta has agreed to a new accord with chief executive Mark Zuckerberg to prevent him from leaving California over a proposed state tax on billionaires.
• Nevertheless, Zuckerberg informed Meta's board last month that he was thinking of moving his primary residence out of California, and even selling his property in the state.
• The measure would impose a one-time 5% tax on residents with a net worth of more than $1bn.

For context, the agreement gives Zuckerberg, whose wealth is estimated to exceed $200bn (£149bn), even more shares in Meta to create up for the fraction of his fortune he may lose if the tax wins voter approval in November.

Meanwhile, the measure would impose a one-time 5% tax on residents with a net worth of more than $1bn. It would probable see the Facebook co-founder pay around $10bn in further state taxes.

He secured the accord with a special committee of Meta after "robust" and "at several points, contentious" negotiations, according to a Wednesday financial disclosure.

California is home to most of the US's technology giants and there are around 225 billionaires who reside in the state, according to the Americans for Tax Fairness campaign group.

For context, the wealth of such individuals, including Zuckerberg, has ballooned over recent years. Meanwhile, his estimated effective tax rate in California was less than 1%, external each year.

Nevertheless, Zuckerberg informed Meta's board last month that he was thinking of moving his primary residence out of California, and even selling his property in the state. His main homes in Californa are in Palo Alto and Lake Tahoe.

Such a move "would be public and inevitably noted and commented upon by company employees", Zuckerberg informed the board.

It would additionally "raise questions for management of the company going forward", he maintained.

In response, Meta decided to create more shares of stock in the firm so as to provide Zuckerberg a way to essentially create up any wealth he may lose through the tax proposal.

Through what's known as a stock split confirmed by the business on Wednesday, Meta created an entirely new type of stock and offered one new share to each existing shareholder. Zuckerberg is one of the company's largest shareholders and famously controls the firm through the design of his holdings.

Through the accord, he will receive more stock, more often, and additionally be able to sell it on a quarterly basis, according to the company's financial filing. The shares will not change his level control over Meta, but they will allow him to cash in more easily on the company's value.

In practice, the accord appears to be effective even if the one-time tax in California does not pass, and will go on for eight years – as long as Zuckerberg remains a resident of California.

Meta called the accord with Zuckerberg its "Founder Alignment Agreement, " saying it was "critically important" to keep him leading the business from California given the "dramatic and unprecedented transformation taking place in the tech industry and global economy related to artificial intelligence."

When Zuckerberg began working outside of the office and mostly from his substantial compound in Kauai, Hawaii, the firm alluded to difficulties the firm experienced during the Covid-19 pandemic.

After a surge in hiring at Meta during the pandemic, a whistleblower scandal that led to renewed focus on child safety, and a refocus within the firm to building out the "metaverse, " which included renaming the business Meta from Facebook, the firm began mass layoffs and restructuring.

Layoffs have continued into this year. The company's headcount is down 15% from a year ago, meaning it has shed at least 10, 000 workers.

Today, the firm has moved away from the "metaverse, " or virtual platforms, and is more focused on artificial intelligence products and related tools.

With Zuckerberg leading the company's efforts to catch up in the AI race, Meta's board remarked it sees a future of "tremendous market opportunity" for the business.

Major tech firms are set to spend an estimated $1 trillion, external this year alone developing AI and the costly infrastructure around it, like data centres.

Meta remarked on Wednesday it planned to spend as much as $145bn this year on AI projects. The firm has climbed the amount it expects to spend on AI each financial quarter so far this year.

It is spending so much on the technology that it posted negative cash flow for the first time since the firm went public 14 years ago. Cash flow represents the funds a business retains after paying for operations and investments, meaning Meta is now spending more funds than it is bringing in.

And the firm intends to spend even more in the year ahead. Susan Li, Meta's chief financial officer, remarked on Wednesday that another benefit of the stock split would be to provide the firm more ways to finance future spending on AI work.

Notably, the degree of the company's spending on AI, without an clear new revenue stream coming from it, appeared to spook investors on Thursday.

Meta's shares fell more than 7%, wiping more than $100bn off of the company's market capitalisation, a key metric applied worldwide to measure the value of a publicly-traded business.

In short, zuckerberg wins Meta deal to help him foot bill for possible California is the central thread here, and readers can expect follow-up reporting as the picture becomes clearer.